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PROF MAHABIR EDCATIONAL CULTURUL & WELFARE SOCIETY ..... Appellant
Through : Mr.Jai Sahai Endlaw, Advocate.
Through : Mr.Neeraj Yadav and Ms.Aditi Sharma, Advocates.
JUDGMENT
1. This Regular First Appeal is preferred by the appellant against the judgment and decree dated 27.07.2018 passed by the learned Additional District Judge-04/East District, Karkardooma Courts, Delhi/ (hereinafter as the learned ‘Trial Court’) in Civil Suit No.125/2017 whereby the suit filed by appellant was dismissed.
2. The brief facts which led to filing of this appeal are appellant filed the aforesaid Civil Suit for specific performance in respect of the agreement to sell dated 30.06.2006 pertaining to the property No.742, situated in revenue estate of Village Mandawali, Fazadpur, Shahdara, Delhi, admeasuring three bigha and six biswas (hereinafter referred as the ‘suit property’), owned by the respondent. The respondent had informed 2019:DHC:4876 the suit property was under dispute as four persons namely Amin Chand, Jagan Singh, Prem Singh and Dhiraj Singh were in unauthorised possession of the said property and Suit No.486/1977 was filed by the respondent herein against them which, though, was decreed on 28.08.2001, but the RFA(OS) No.29/2001 was still pending as filed by two of the unauthorised occupants. The said agreement to sell was for Rs.1,50,000,00/-; out of which the appellant had paid Rs.5.00 Lac at the time of the entering into the agreement but since the earnest money was of Rs.30.00 Lac; the balance Rs.25.00 Lac was paid to the respondent through a post dated cheque dated 03.11.2006. It was agreed the balance sale consideration would be payable at the time of the execution of the sale deed on or before 03.01.2007.
3. On 30.10.2006, the appellant came to know about a public notice published in Dainik Jagran newspaper about filing of the civil suit against respondent by one Mr.G.V.S. Tomar, pending before the Court of learned Additional District Judge, Delhi with respect to the suit property.
4. The appellant when confronted the respondent and sought clarification, the respondent could not provide satisfactory explanation or reply to the existence of such litigation, hence the appellant issued directions to his banker to stop the payment of the cheque dated 03.11.2006 for Rs.25.00 lacs i.e., balance of the earnest money. On 31.10.2006, the appellant had rather informed the respondent vide legal notice not to present the PDC dated 03.11.2006 for encashment on the aforesaid ground. On 09.11.2006, the respondent had given a reply to the notice dated 31.10.2006 stating inter alia that cheque was sent for encashment, but it had returned with remarks insufficient funds and as such the appellant was not ready and willing to complete the transaction, hence the advance payment of Rs.5.00 Lac was forfeited.
5. On 11.02.2009, the appellant filed the abovesaid suit for specific performance of agreement to sell dated 30.09.2006 - Ex.P[1]. The respondent appeared and filed the written statement wherein he claimed that in view of the failure of the appellant to make balance payment of Rs.25.00 Lac, the agreement dated 30.09.2006 was cancelled and earnest money was forfeited. It was also alleged the appellant had concluded with Mr.G.V.S.Tomar to avoid payment of consideration.
6. Following issues were framed by the learned Trial Court:- “(i) Whether the plaintiff performed or has always been ready and willing to perform its part of contract according to the Agreement to Sell of 30th September, 2006 and if so whether plaintiff is entitled to specific performance of Agreement to Sell of 30th September, 2006? OPP
(ii) Whether the Agreement to Sell of 30th September, 2006 stood cancelled, as alleged in preliminary objections? If so, its effects? OPD.
(iii) What is the effect of dishonouring of the cheque of Rs.25,00,000/given by the plaintiff to defendant in terms of Agreement to Sell of 30th September, 2006? OPD
(iv) Relief”
7. On the issue of maintainability, the learned Trial Court erred in determining the suit was not maintainable relying upon I.S.Sikandar (Dead) by LRs vs K.Subramani and Others (2013) 15 SCC 27. The Coordinate Bench of this Court relying upon Mrs.Kanthamani vs. Mrs.Nasreen Ahmed 2017(15) SCC 27 had rather settled the issue. In Radhey Shyam vs Varsha Yadav 2018 VI AD (Delhi) 175 this Court held:-
8. Since no issue of maintainability was framed, hence the learned Trial court erred in holding the suit was not maintainable.
9. The learned Trial Court vide the impugned judgment had also held a) the testimony of the Secretary of the appellant society is bereft of the details as to what was the explanation given by the respondent and why it was not found satisfactory. PW[1] had deposed in his affidavit that he being the secretary of appellant society on seeing public notice dated 30.10.2006 had rushed to the respondent and met him at his office and asked him for clarifications and though, the respondent had given the explanation but was not found satisfactory. However PW[1] did not say anything in his affidavit as to what was such explanation and why the appellant society was not satisfied with such explanation; b) the contents of such explanation have also not been disclosed despite the respondent admittedly was not in possession of the suit property and the appellant has been made aware of the ongoing litigation between the respondent and unathorised occupantsm, pending before the Division Bench of this Court, yet the appellant had agreed to purchase the suit property and even had paid Rs.5.00 Lac as part of the earnest money. On the other hand, the respondent/DW[1] and his son DW[2], both had testified they had convinced the secretary of the appellant society (PW[1]) and even offered PW[1] the refund of Rs.5.00 Lac; c) it was incumbent upon the appellant society to disclose the explanation given by the respondent, particularly, considering the peculiar nature of the suit property viz under litigation; d) there is no provision in the Indian Contract Act which permits a party to avoid performance of the contract/promise merely due to suspicion that the other party may not be in a position to perform the contract; and e) admittedly, Mr.G.V.S.Tomar had instituted a suit against the respondent, subsequent to the execution of the agreement to sell Ex.P[1] as such the respondent could not have disclosed such subsequent litigation in the agreement itself. Even otherwise, in his suit Mr.Tomar nowhere asserted himself to be an owner and admittedly filed only a photocopy of the agreement to sell allegedly executed by the respondent for a piece of 300 sq.yds. of land, out of 4000 sq.yds. of land viz. the suit plot. Even the original agreement to sell was never filed by Sh.Tomar in his suit, hence the respondent repeated alleged such suit was a frivolous suit, moreso it pertain to even less than 1/10th of the subject property and hence there was no reason for the appellant to stop the payment of Rs.25.00 lac, when, admittedly, the agreement to sell Ex.P[1] contained a clause the payment of Rs.25.00 lac could not be stopped by the appellant in any circumstance; f) the learned Trial Court also referred to Section 54 of The Contract Act, particularly illustration c to say when a contract consists of reciprocal promises, such that one of them cannot be performed till the other has been performed, and the promiser of the promise last mentioned fails to perform it, such promiser cannot claim performance of reciprocal promise; it was observed the agreement to sell Ex.P1consisted of reciprocal promises, such that the performance of sale was linked to the reciprocal promise to make the payment of Rs.30.00 Lac by 03.11.2006. The agreement to sell rather stipulated the post dated cheque bearing No.835233 dated 03.11.2006 drawn on Syndicate Bank, Nirman Vihar, Delhi for Rs.25.00 Lac is to be cleared in whatsoever circumstances, lest the amount of Rs.5.00 Lac shall be forfeited and g) the plea of suspicion was palpably false and moonshine solely created to hide the appellant’s incapacity to meet its obligation under the agreement. The statement of bank account of appellant, from 01.11.2006 to 04.11.2006 Mark P[1] show the appellant society had a balance of Rs.5.14 Lac only in its bank account and though it had instructed the bank to stop payment but in fact the PDC dated 03.11.2006 was dishonored due to insufficiency of funds in its account.
10. The learned Trial Court in the impugned judgment also held:- "30. The properties of secretary are different from the properties owned by society. Merely because secretary of the society has several properties does not mean that the society has control over these properties. The testimony of PW-1 / Secretary, in this regard, also cannot be accepted as subsequently such statement can be made by any member of the society to show availability of the funds. If the secretary was actually willing to give his properties to the society then he should have done so by donating the properties to the society, but without donating / gifting the properties to the society, the secretary cannot say that he was willing to sell his properties to arrange funds for the plaintiff society. If readiness and willingness is accepted in such manner, then there would be no case left as every party would prove readiness and willingness by examining distant relative or friend who hold properties worth the consideration amount.
33. There is no resolution or minutes of meting placed on record by plaintiff society to show its members had resolved to purchase the suit property from the funds procured by selling the properties of its secretary and its family members (Reliance in this regard is placed upon the judgment titled as Matadin Yadav Vs. Midas Lid Pvt. Ltd., 2013 (139) DRJ 280).
34. It is also pertinent to mention that the cheque of balance earnest amount of Rs. 25 lakhs is dated 03.11.2006 and as per plaintiff society, the public notice regarding litigation with Sh. G.V.S. Tomar came into its knowledge on 30.10.2006 i.e. just two days prior to the date on which cheque was to be presented. Admittedly, the plaintiff society did not have funds to honor the said cheque on 31.10.2006. Hence, the arrangement had to be made within three days i.e. 31.10.2006, 01.11.2006 and 02.11.2006 to deposit sufficient amount in plaintiff's bank account so that the cheque is honored, however, no evidence has been adduced on record to prove that any agreement to sell / attempt to dispose off any property of the secretary was made. There is no iota of evidence to establish had the notice dated 31.10.2006 not been published, the plaintiff society had funds or could have arranged funds in three days i.e. 31.10.2006, 01.11.2006 and 02.11.2006 to honor the cheque of Rs. 25 lakhs of balance earnest money. Merely stating and placing on record, title documents of properties of secretary of the society would not suffice. The inevitable conclusion is that the plaintiff society neither had liquidated funds nor it had the capacity to raise funds for payment of balance earnest amount of Rs.25 lakhs."
11. Though the learned Trial Court has gone to discuss the collusion between Mr.G.V.S.Tomar and the appellant herein, but to me, it was not needed, being not relevant to decide the controversy in issue. Further the learned counsel for the appellant argued that DW[1] – the respondent in his affidavit Ex.DW1/A did not depose any fact, as contained in his written statement, except the case is false and that his son DW[2] would depose, but, admittedly, in his cross-examination, the appellant had put its entire case to the respondent and the respondent did reply to each and every question asked, thus proving his case through his cross-examination. The appellant rather helped the respondent to prove his contention by eliciting facts not so deposed by DW[1] and to bring those on record. Even otherwise, the plaintiff cannot take resort to shortcomings of the defendant to prove his case and rightly held so by the learned Trial Court.
12. The evidence of witnesses from both the sides during trial, admittedly proved the execution of agreement to sell dated 30.06.2006- Ex.P[1]; public notice dated 30.10.2006-Ex.PW1/4; notice dated 31.10.2006-Ex.P[2] issued by the appellant; reply dated 09.11.2006-Ex.D[1], given by the respondent; the dishonor of the post dated cheque dated 03.11.2006 of Rs.25.00 Lac issued by the appellant, due to insufficiency of funds; and lastly there being no sufficient balance in the account Mark P[1] of the appellant on the relevant date of encashment of cheque dated 03.11.2006.
13. The learned counsel for the appellant then argued the time was never an essence of the contract and referred to Section 55 of the Indian Contract Act, which read:
14. It is though a settled position in agreements of sale/purchase of immovable properties that such liverage can be given, but one cannot ignore the decision in Sardamani Kandappan vs S. Rajalakshmi and Others (2011) 12 SCC 18 which read:-
17. The appellant could have entered possession of the suit property only on assignment i.e. by way of sale deed, but it surreptitiously took over the possession after allegedly settling the matter with Mr.G.V.S.Tomar. Such possession, allegedly, is held to be illegal by the courts of competent jurisdiction but since is not relevant here I need not deliberate on this issue. Suffice is to say less than 5% of the sale consideration is paid till date by the appellant but strangely enough it pleads its readiness.
18. In Baldev Behl & Others vs Bhule & Others 2012 (132) DRJ 247 wherein the Court noted:-
19. In N.P.Thirgnanam (dead) by LRs vs Dr. R Jagan Mohan Rao & Others AIR 1996 SC 116 it was held:-
20. In Sushil Jain vs Meharban Singh & Others 2012 (132) DRJ 421 it was held:-
November, 1995 till the filing of the suit and even thereafter till the present stage of final arguments......"
21. Thus in view of the peculiar facts and circumstances as detailed above, where the appellant has not been able to show its readiness by depicting existence of its financial capability throughout viz, a condition precedent to grant the relief of specific performance and also where the appellant had given to the seller even less than 5% of the sale consideration and rather filed this suit after 2½ years of the transaction, the order of the learned Trial Court cannot be faulted with. There is no merit in the appeal, hence is dismissed. The pending application(s), if any, also stands disposed of.
22. No order as to costs.
YOGESH KHANNA, J. SEPTEMBER 24, 2019 M